Two Milford business owners indicted for workers' comp fraud

Two Milford business owners have been indicted for allegedly failing to accurately report their total payroll and workforce, according to Attorney General Maura Healey.

The business owners allegedly were granted lower premiums on the policies of three roofing companies they formed between 2008 and 2014 as a result of this underreporting. This put the insurance companies at risk of covering undisclosed employees for injuries that occurred or may have occurred during the policy period, according to Healey. The pair avoided paying more than $615,000 in insurance premiums, according to the AG's office.

"Premium avoidance and insurance fraud leaves lawful employers at a disadvantage and undermines the insurance system," AG Healey said in a statement. "Insurance fraud has the potential to negatively affect everyone by raising rates and damaging the integrity of the system."

According to the attorney general, the two formed three Milford-area roofing companies between 2008 and 2014: Byron Construction in 2008, Nationwide Construction Corporation in 2010, and First Nationwide Construction Corp. in 2012. Each company was allegedly insured for workers' compensation and were each assigned premiums based on their reporting.

The Workers' Compensation Ratings and Inspection Bureau (WCRIB) establishes different categories of policy cost depending on the risk of injury associated with different types of jobs and applies the payroll and size of workforce to premium rates, according to Healey's office.

The Insurance Fraud Bureau of Massachusetts (IFB) referred the cases against the two business owners to the Attorney General's Office after an investigation into reports that the companies were committing insurance fraud.